China’s new investment law seeks fair competition

China’s National People’s
Congress (NPC) has passed a landmark foreign investment law to provide stronger
protection, ease restrictions and open Chinese markets to foreign investors.

The country’s top legislative council adopted the law on Friday at the end of the second session of the 13th NPC gathering at Beijing’s Great Hall of the People from March 3.

Li: China will continue to cut taxes

The law, which will be
effective in January next year, also seeks to boost transparency of foreign
investment policies and ensure that foreign-invested enterprises participate in
market competition on an equal basis with their Chinese counterparts.

Addressing dignitaries
that included Chinese President Xi Jingping and scores of foreign diplomats,
Chinese Premier Li Keqiang said the regulation came about as Beijing focuses on
stimulating over its 100 million market entities to spar both local and
international growth.

“China will also continue
to cut taxes and fees and level the playing field for all market players to
achieve high quality development,” he said.

Statistics by the United
Nations Conference on Trade and Development (Unctad) show that by the end of
2018, over 950 000 foreign-invested enterprises had been set up in China, with
the accumulated foreign direct investment (FDI) exceeding $2.1 trillion.

According to the UN trade
agency, FDI into China further ranks high among developing countries for 27
consecutive years.

Among others, the new
foreign investment law also stipulates that the Chinese government shall
protect the intellectual property rights of foreign investors and
foreign-invested enterprises.

The new law will replace
the previous laws on Chinese-foreign equity joint ventures, wholly foreign-owned
enterprises and Chinese-foreign contractual joint ventures passed in 1979 and
the 1980s.

Reacting to Beijing’s
move, Adam Dunnett, secretary general of the European Union (EU) Chamber of
Commerce in China told journalists that the new law will give more people
confidence in China.